[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/siu/wpaper/33-2012.html
   My bibliography  Save this paper

Gambling on Genes: Ambiguity Aversion Explains Investment in Sisters’ Children

Author

Listed:
  • Brishti Guha

    (Singapore Management University, School of Economics)

Abstract
Many men invest in their sisters’ children instead of their wives’. Existing theories addressing such behavior depend on the level of paternity probability in such men’s societies being implausibly low. I link this anthropologically observed investment behavior with the experimentally observed phenomenon that some individuals are ambiguity averse. Arguing that men’s decisions are made under ambiguity, I show that an increase in ambiguity aversion results in investment in sisters’, rather than wives’, children. I show that this can happen even under risk neutrality. I also consider the special cases of a SEU maximizer and of extreme ambiguity aversion in the Gilboa-Schmeidler sense. Extremely ambiguity averse individuals invest in sister’s children regardless of risk preference or actual paternity rates. An increase in ambiguity, rather than an increase in ambiguity aversion, in contrast, may affect the investment decision either way. When sufficiently many men are ambiguity averse, inheritance norms could become avuncular, affecting women’s incentives and generating a bias towards actual nonpaternity. This is consistent with, but represents an unusual explanation of, data which show correlations between inheritance norms and actual paternity rates.

Suggested Citation

  • Brishti Guha, 2012. "Gambling on Genes: Ambiguity Aversion Explains Investment in Sisters’ Children," Working Papers 33-2012, Singapore Management University, School of Economics.
  • Handle: RePEc:siu:wpaper:33-2012
    as

    Download full text from publisher

    File URL: https://mercury.smu.edu.sg/rsrchpubupload/20909/33_2012_GamblingonGenes.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johanna Etner & Meglena Jeleva & Jean‐Marc Tallon, 2012. "Decision Theory Under Ambiguity," Journal of Economic Surveys, Wiley Blackwell, vol. 26(2), pages 234-270, April.
    2. Gilles SAINT-PAUL, 2015. "Genes Legitimacy and Hypergamy : Another Look at the Economics of Marriage," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(4), pages 331-377, December.
    3. Korn, Evelyn, 2000. "On the Formation of Family Structures," Public Choice, Springer, vol. 105(3-4), pages 357-372, December.
    4. Jürgen Eichberger & David Kelsey, 2011. "Are the treasures of game theory ambiguous?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 313-339, October.
    5. I-Fen Lin & Anne Case & Sara McLanahan, 1999. "Household Resource Allocation in Stepfamilies: Darwin Reflects on the Plight of Cinderella," American Economic Review, American Economic Association, vol. 89(2), pages 234-238, May.
    6. Francesconi, Marco & Ghiglino, Christian & Perry, Motty, 2009. "On the Origin of the Family," IZA Discussion Papers 4637, Institute of Labor Economics (IZA).
    7. Johanna Etner & Meglena Jeleva & Jean‐Marc Tallon, 2012. "Decision Theory Under Ambiguity," Journal of Economic Surveys, Wiley Blackwell, vol. 26(2), pages 234-270, April.
    8. Adam Dominiak & Wendelin Schnedler, 2011. "Attitudes toward uncertainty and randomization: an experimental study," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 289-312, October.
    9. Diamond, Arthur M, Jr & Locay, Luis, 1989. "Investment in Sister's Children as Behavior towards Risk," Economic Inquiry, Western Economic Association International, vol. 27(4), pages 719-735, October.
    10. Dirk Bethmann & Michael Kvasnicka, 2011. "The institution of marriage," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(3), pages 1005-1032, July.
    11. Bishai, David & Grossbard, Shoshana, 2007. "Far Above Rubies: The Association Between Bride Price and Extramarital Sexual Relations in Uganda," IZA Discussion Papers 2982, Institute of Labor Economics (IZA).
    12. John Dickhaut & Radhika Lunawat & Kira Pronin & Jack Stecher, 2011. "Decision making and trade without probabilities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 275-288, October.
    13. Scott Condie & Jayant Ganguli, 2011. "Informational efficiency with ambiguous information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 229-242, October.
    14. Simone Cerreia-Vioglio & Paolo Ghirardato & Fabio Maccheroni & Massimo Marinacci & Marciano Siniscalchi, 2011. "Rational preferences under ambiguity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 341-375, October.
    15. Han Ozsoylev & Jan Werner, 2011. "Liquidity and asset prices in rational expectations equilibrium with ambiguous information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 469-491, October.
    16. Robert Nau, 2011. "Risk, ambiguity, and state-preference theory," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 437-467, October.
    17. Heath, Chip & Tversky, Amos, 1991. "Preference and Belief: Ambiguity and Competence in Choice under Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 5-28, January.
    18. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February.
    19. Lena Edlund, 2006. "Marriage: Past, Present, Future?," CESifo Economic Studies, CESifo Group, vol. 52(4), pages 621-639, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fujii, Tomoki, 2017. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," World Development, Elsevier, vol. 100(C), pages 69-84.
    2. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(1), pages 131-151, September.
    3. Brishti Guha, 2012. "Grandparents as Guards: A Game Theoretic Analysis of Inheritance and Post Marital Residence in a World of Uncertain Paternity," Working Papers 37-2012, Singapore Management University, School of Economics.
    4. Robert Nau, 2011. "Risk, ambiguity, and state-preference theory," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 437-467, October.
    5. Lena Edlund, 2013. "The Role of Paternity Presumption and Custodial Rights for Understanding Marriage Patterns," Economica, London School of Economics and Political Science, vol. 80(320), pages 650-669, October.
    6. Francesconi, Marco & Ghiglino, Christian & Perry, Motty, 2009. "On the Origin of the Family," IZA Discussion Papers 4637, Institute of Labor Economics (IZA).
    7. Francesconi, Marco & Ghiglino, Christian & Perry, Motty, 2016. "An evolutionary theory of monogamy," Journal of Economic Theory, Elsevier, vol. 166(C), pages 605-628.
    8. Dirk Bethmann, 2011. "Marriage Regimes," FEMM Working Papers 110029, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    9. Gonçalo Faria & João Correia-da-Silva, 2012. "The price of risk and ambiguity in an intertemporal general equilibrium model of asset prices," Annals of Finance, Springer, vol. 8(4), pages 507-531, November.
    10. Alain Chateauneuf & Luciano De Castro, 2011. "Ambiguity Aversion and Absence of Trade," Discussion Papers 1535, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    11. Luciano Castro & Alain Chateauneuf, 2011. "Ambiguity aversion and trade," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 243-273, October.
    12. Jeleva, Meglena & Tallon, Jean-Marc, 2016. "Ambiguïté, comportements et marchés financiers," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 351-383, Mars-Juin.
    13. Aurélien Baillon & Zhenxing Huang & Asli Selim & Peter P. Wakker, 2018. "Measuring Ambiguity Attitudes for All (Natural) Events," Econometrica, Econometric Society, vol. 86(5), pages 1839-1858, September.
    14. Massimo Guidolin & Francesca Rinaldi, 2013. "Ambiguity in asset pricing and portfolio choice: a review of the literature," Theory and Decision, Springer, vol. 74(2), pages 183-217, February.
    15. Dirk Bethmann & Michael Kvasnicka, 2011. "The institution of marriage," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(3), pages 1005-1032, July.
    16. Eisei Ohtaki & Hiroyuki Ozaki, 2015. "Monetary equilibria and Knightian uncertainty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(3), pages 435-459, August.
    17. Yang, Fanzheng & Yu, Li, 2016. "With or without siblings: Sorting into competition in the experimental labor market," China Economic Review, Elsevier, vol. 41(C), pages 284-298.
    18. Jouvet, Pierre-André & Le Cadre, Elodie & Orset, Caroline, 2012. "Irreversible investment, uncertainty, and ambiguity: The case of bioenergy sector," Energy Economics, Elsevier, vol. 34(1), pages 45-53.
    19. David De La Croix & Fabio Mariani, 2015. "From Polygyny to Serial Monogamy: A Unified Theory of Marriage Institutions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(2), pages 565-607.
    20. Milo Bianchi & Jean-Marc Tallon, 2019. "Ambiguity Preferences and Portfolio Choices: Evidence from the Field," Management Science, INFORMS, vol. 65(4), pages 1486-1501, April.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:siu:wpaper:33-2012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: QL THor (email available below). General contact details of provider: https://edirc.repec.org/data/sesmusg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.